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After dropping out of high school Lederer enlisted in the navy in 1930. He graduated from the US Naval Academy in 1936. His first appointment was as the junior officer of the USS Tutuila, a river gunboat on the Yangtze River. With the advent of World War Two, he was a line officer in Asia, and then in the Atlantic theater, serving as a ship's navigation officer in the 1943 Allied invasion of Sicily. He was eventually posted to the Pentagon as a public information officer, and then served the same duty as special assistant to CINCPAC, Hawaii.[4]

His best selling work, 1958's The Ugly American, was one of the two novels he co-wrote with Eugene Burdick, a former navy lieutenant commander and Oxford don. Disillusioned with America's diplomatic efforts in Southeast Asia, Lederer and Burdick sought to demonstrate that American officials and civilians could make a substantial difference in Southeast Asian politics if they were willing to learn local languages, follow local customs and employ regional military tactics. They were concerned that if American policy makers continued to ignore the logic behind these lessons, Southeast Asia would fall under Soviet or Chinese influence. In the book’s epilogue they argue for the creation of “a small force of well-trained, well-chosen, hard-working and dedicated professionals” fluent in the local language — not unlike the Peace Corps, which John F. Kennedy proposed in 1960.[5]

In A Nation of Sheep, Lederer identified intelligence failures in Asia. Having spent later years of his naval service as a public information officer, first at the Pentagon, then at Pearl Harbor Hawaii,[6] where he was special assistant to Admiral Felix Stump, the U.S. Pacific Fleet Commander.[2] In "Government by Misinformation" he investigates the sources he believes lead to American foreign policy:

In Our Own Worst Enemy Lederer relates that, as a young Navy Lieutenant, Junior Grade in 1940, he had a chance meeting with a Jesuit priest, Father Pierre Cogny, and his Vietnamese assistant, "Mr. Nguyen", while waiting out a Japanese bombing raid in China. Father Pierre asked Lederer if he had a copy of the United States Declaration of Independence on his gunboat, and Lederer said that he did and provided them with a copy. "Mr. Nguyen" was eager to deliver the document to "Tong Van So" who later became better known as Ho Chi Minh, the Vietnamese Communist revolutionary and statesman who served as prime minister (1946–1955) and president (1945–1969) of the Democratic Republic of Vietnam (North Vietnam). The 1945 Proclamation of Independence of the Democratic Republic of Vietnam, written by Ho Chi Minh, begins by quoting from the American document.[7] This book describes how the United States supported a corrupt President Diem in South Vietnam, ignored massive black market selling of stolen U.S. military supplies, food, and foreign aid, and refused to stand up to corrupt local officials who stole donated food and supplies, took kickbacks and bullied their own population, as we continued saying "It's their country, and we Americans are only guests here."